Crypto Frontline

Although we are in a period when investing in cryptocurrencies is not trending like a year, extreme oversold conditions and low valuation are beginning to look appealing for the institutional side. Wednesday, February 13^th, news of US-based pension funds starting to invest in cryptocurrencies were in the spotlight, so let’s what is this all about.

The Morgan Creek Blockchain Opportunities Fund

Morgan Creek Digital, an asset management firm based in Virginia, United States, had recently launched a $40 million crypto venture capital fund, according to a recent Bloomberg report. Backed by two pension funds – Fairfax County Police and Fairfax County Employees’, the fund is investing in the crypto industry, a move which might sound weird, considering the defensive investing approach that pension funds usually have.

This is not the first time we hear about companies from the US increasingly interested to invest in cryptocurrencies. We’ve seen recently how Fidelity, the well-known Wall Street giant, could launch Bitcoin-related services by March this year.

Blockchain-based companies are gaining even more traction than cryptocurrencies and a good example with that respect is Vakt, an oil platform which continues to attract big players from the industry.

Getting back to our today’s subject, the $40 million venture fund will also be backed by an insurance company, a university endowment, and a private foundation, according to Anthony Pompliano, founder at Morgan Creek Digital, which did not want to provide detailed information on the subject.

However, he managed to say that the fund is structured like any other traditional venture capital fund, and “will invest in the equity of companies in the blockchain and digital assets industry”. Other than that, the fund will also hold a small portion of the funds in liquid cryptocurrencies and we assume Bitcoin and other major cryptocurrencies will be eyed.

Is this the beginning of a bull run?

Also known as the “smart money” institutional investors are generally the ones that initiate new trends. Whether Bitcoin has already bottomed yet is still unclear, but other companies deciding to invest in cryptocurrencies could be an early indication of a bull run.

That does not mean the 2018 lows won’t be breached. From a valuation standpoint, most of the cryptocurrencies are down between 70% to as much as 95% as compared to a year ago, which might make them appealing in the eyes of bigger investors. Regulatory uncertainty had kept them away thus far, but as signs of improvement will show up, so will institutional investments.